SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 10-Q



(Mark One)

|/X/  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002, OR               
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|/  / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________ TO _________________

Commission file number 1-14369

AMERICAN COMMUNITY PROPERTIES TRUST
(Exact name of registrant as specified in its charter)

|MARYLAND(State or other jurisdiction of incorporation or organization) | 52-2058165(I.R.S. Employer Identification No.)
|---------------------------------------------------------------------- | ----------------------------------------------

222 Smallwood Village Center
St. Charles, Maryland  20602

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report(s), and (2) has been subject to such filing requirements for the past 90 days.

Yes /X/          No /  /

Indicate the number of shares outstanding of each of the issuer's classes of stock, as of the latest practicable date.

5,191,554 Common Shares



AMERICAN COMMUNITY PROPERTIES TRUST
FORM 10-Q
INDEX

|        |                                                                                                                                                              | PageNumber
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------
|PART I  | FINANCIAL INFORMATION                                                                                                                                        |           
|Item 1. | Consolidated Financial Statements                                                                                                                            |           
|        | Consolidated Statements of Income for the Nine Months Ended September 30, 2002 and 2001 (Unaudited)                                                          | 3         
|        | Consolidated Statements of Income for the Three Months Ended September 30, 2002 and 2001 (Unaudited)                                                         | 4         
|        | Consolidated Balance Sheets at September 30, 2002 (Unaudited) and December 31, 2001 (Audited)                                                                | 5         
|        | Consolidated Statements of Cash Flow for the Nine Months Ended September 30, 2002 and 2001 (Unaudited)                                                       | 7         
|        | Notes to Consolidated Statements (Unaudited)                                                                                                                 | 8         
|Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations for the Nine and Three Month Periods Ended September 30, 2002 and 2001 | 18        
|Item 3. | Quantitative and Qualitative Disclosure about Market Risk                                                                                                    | 26        
|Item 4. | Controls and Procedures                                                                                                                                      | 26        
|PART II | OTHER INFORMATION                                                                                                                                            |           
|Item 1. | Legal Proceedings                                                                                                                                            | 26        
|Item 2  | Changes in Securities and Use of Proceeds                                                                                                                    | 28        
|Item 3. | Defaults Upon Senior Securities                                                                                                                              | 28        
|Item 4. | Submission of Matters to a Vote of Security Holders                                                                                                          | 28        
|Item 5. | Other Information                                                                                                                                            | 28        
|Item 6. | Exhibits and Reports on Form 8-K                                                                                                                             | 28        
|        | Signatures                                                                                                                                                   | 29        





|AMERICAN COMMUNITY PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30,(In thousands, except per share amounts)
(Unaudited)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                 
|                                                                                                                                                                 
|                                                                                                                                                                 
|                                                                                                                                                                 
|                                                                                                                                                                 
|Revenues                                                                                                                                                         
|Community development-land sales                                                                                                                                 
|Homebuilding-home sales                                                                                                                                          
|Equity in earnings from partnerships and developer fees                                                                                                          
|Rental property revenues                                                                                                                                         
|Management and other fees, substantially all from related entities                                                                                               
|Gain from expropriation                                                                                                                                          
|Reimbursement of expenses related to managed entities                                                                                                            
|Interest and other income                                                                                                                                        
|Total revenues                                                                                                                                                   
|                                                                                                                                                                 
|Expenses                                                                                                                                                         
|Cost of land sales                                                                                                                                               
|Cost of home sales                                                                                                                                               
|Selling and marketing                                                                                                                                            
|Rental properties expenses:                                                                                                                                      
|Operating                                                                                                                                                        
|Interest                                                                                                                                                         
|Depreciation and amortization                                                                                                                                    
|Expenses reimbursed from managed entities                                                                                                                        
|General and administrative                                                                                                                                       
|Interest expense                                                                                                                                                 
|Depreciation and amortization                                                                                                                                    
|Write-off of deferred project costs                                                                                                                              
|Total expenses                                                                                                                                                   
|                                                                                                                                                                 
|Income before provision for income taxes and minority interest                                                                                                   
|Provision for income taxes                                                                                                                                       
|                                                                                                                                                                 
|Income before minority interest                                                                                                                                  
|Minority interest                                                                                                                                                
|Net income                                                                                                                                                       
|Basic and fully diluted net income per share                                                                                                                     
|Weighted average shares outstanding-basic                                                                                                                        
|Weighted average shares outstanding-diluted                                                                                                                      
|                                                                                                                                                                 
|                                                                                                                                                                 
|                                                                                                                                                                 
|                                                                                                                                                                 
|The accompanying notes are an integral part of these consolidated statements.                                                                                    





|AMERICAN COMMUNITY PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30,(In thousands, except per share amounts)
(Unaudited)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                  
|                                                                                                                                                                  
|                                                                                                                                                                  
|                                                                                                                                                                  
|                                                                                                                                                                  
|Revenues                                                                                                                                                          
|Community development-land sales                                                                                                                                  
|Homebuilding-home sales                                                                                                                                           
|Equity in earnings from partnerships and developer fees                                                                                                           
|Rental property revenues                                                                                                                                          
|Management and other fees, substantially all from related entities                                                                                                
|Reimbursement of expenses related to managed entities                                                                                                             
|Interest and other income                                                                                                                                         
|Total revenues                                                                                                                                                    
|                                                                                                                                                                  
|Expenses                                                                                                                                                          
|Cost of land sales                                                                                                                                                
|Cost of home sales                                                                                                                                                
|Selling and marketing                                                                                                                                             
|Rental properties expense:                                                                                                                                        
|Operating                                                                                                                                                         
|Interest                                                                                                                                                          
|Depreciation and amortization                                                                                                                                     
|Expenses reimbursed from managed entities                                                                                                                         
|General and administrative                                                                                                                                        
|Interest expense                                                                                                                                                  
|Depreciation and amortization                                                                                                                                     
|Write-off of deferred project costs                                                                                                                               
|Total expenses                                                                                                                                                    
|                                                                                                                                                                  
|Income before provision for income taxes and minority interest                                                                                                    
|Provision for income taxes                                                                                                                                        
|                                                                                                                                                                  
|Income before minority interest                                                                                                                                   
|Minority interest                                                                                                                                                 
|Net income                                                                                                                                                        
|Basic and fully diluted net income per share                                                                                                                      
|Weighted average shares outstanding-basic                                                                                                                         
|Weighted average shares outstanding-diluted                                                                                                                       
|                                                                                                                                                                  
|                                                                                                                                                                  
|                                                                                                                                                                  
|                                                                                                                                                                  
|                                                                                                                                                                  
|The accompanying notes are an integral part of these consolidated statements.                                                                                     





|AMERICAN COMMUNITY PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS(In thousands)ASSETS
|-----------------------------------------------------------------------------------
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Cash and Cash Equivalents                                                          
|Unrestricted                                                                       
|Restricted                                                                         
|                                                                                   
|Assets Related to Investment Properties                                            
|Operating properties, net of accumulated depreciation of                           
|$25,999 and $25,071, respectively                                                  
|Investment in unconsolidated apartment partnerships, net of                        
|deferred income of $172 and $380, respectively                                     
|Investment in unconsolidated commercial property partnerships                      
|Other receivables, net of reserves of $183 and $203, respectively                  
|                                                                                   
|Assets Related to Community Development                                            
|Land and development costs                                                         
|Puerto Rico                                                                        
|St. Charles, Maryland                                                              
|Notes receivable on lot sales and other                                            
|                                                                                   
|Assets Related to Homebuilding                                                     
|Homebuilding construction and land                                                 
|                                                                                   
|Other Assets                                                                       
|Receivables and other                                                              
|Property, plant and equipment, less accumulated depreciation                       
|of $1,819 and $1,911, respectively                                                 
|                                                                                   
|Total Assets                                                                       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|The accompanying notes are an integral part of these consolidated statements.      





|AMERICAN COMMUNITY PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS(In thousands)LIABILITIES AND SHAREHOLDERS' EQUITY
|-----------------------------------------------------------------------------------------------------------------
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Liabilities Related to Investment Properties                                                                     
|Recourse debt                                                                                                    
|Non-recourse debt                                                                                                
|Accounts payable, accrued liabilities and deferred income                                                        
|                                                                                                                 
|                                                                                                                 
|Liabilities Related to Community Development                                                                     
|Recourse debt                                                                                                    
|Accounts payable, accrued liabilities and deferred income                                                        
|                                                                                                                 
|                                                                                                                 
|Liabilities Related to Homebuilding                                                                              
|Recourse debt                                                                                                    
|Accounts payable and accrued liabilities                                                                         
|                                                                                                                 
|                                                                                                                 
|Other Liabilities                                                                                                
|Accounts payable and accrued liabilities                                                                         
|Notes payable and capital leases                                                                                 
|Accrued income tax liability-current                                                                             
|Accrued income tax liability-deferred                                                                            
|                                                                                                                 
|Total Liabilities                                                                                                
|                                                                                                                 
|Shareholders' Equity                                                                                             
|Common shares, $.01 par value, 10,000,000 shares authorized,                                                     
|5,191,554 shares issued and outstanding                                                                          
|Treasury stock, 17,359 shares at cost, $5                                                                        
|Additional paid-in capital                                                                                       
|Retained earnings                                                                                                
|Total Shareholders' Equity                                                                                       
|Total Liabilities and Shareholders' Equity                                                                       
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|The accompanying notes are an integral part of these consolidated statements.                                    





|AMERICAN COMMUNITY PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 30,(In thousands)
(Unaudited)
|------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                          
|                                                                                                                                          
|                                                                                                                                          
|Cash Flows from Operating Activities                                                                                                      
|Net income                                                                                                                                
|Adjustments to reconcile net income to net cash provided by                                                                               
|operating activities:                                                                                                                     
|Depreciation and amortization                                                                                                             
|Provision for deferred income taxes                                                                                                       
|Equity in earnings-unconsolidated apartment partnerships and developer fees                                                               
|Distributions-unconsolidated apartment partnerships                                                                                       
|Equity in earnings-unconsolidated commercial property partnerships                                                                        
|Distributions-unconsolidated commercial property partnerships                                                                             
|Cost of sales-community development                                                                                                       
|Cost of sales-homebuilding                                                                                                                
|Homebuilding-construction expenditures                                                                                                    
|Changes in notes and accounts receivable                                                                                                  
|Changes in accounts payable, accrued liabilities and deferred income                                                                      
|Net cash provided by operating activities                                                                                                 
|                                                                                                                                          
|Cash Flows from Investing Activities                                                                                                      
|Investment in land development                                                                                                            
|Change in investments-unconsolidated rental property partnerships                                                                         
|Change in restricted cash                                                                                                                 
|Additions to rental operating properties, net                                                                                             
|(Acquisitions) dispositions of other assets                                                                                               
|Net cash used in investing activities                                                                                                     
|                                                                                                                                          
|Cash Flows from Financing Activities                                                                                                      
|Cash proceeds from debt financing                                                                                                         
|Payment of debt                                                                                                                           
|Issuance of warrants                                                                                                                      
|Payment to acquire treasury stock                                                                                                         
|Net cash provided by (used in) financing activities                                                                                       
|                                                                                                                                          
|Net Decrease in Cash and Cash Equivalents                                                                                                 
|Cash and Cash Equivalents, Beginning of Year                                                                                              
|Cash and Cash Equivalents, September 30                                                                                                   
|                                                                                                                                          
|                                                                                                                                          
|                                                                                                                                          
|                                                                                                                                          
|                                                                                                                                          
|                                                                                                                                          
|The accompanying notes are an integral part of these consolidated statements.                                                             





AMERICAN COMMUNITY PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002



|(1) | ORGANIZATION
|--- | ------------

American Community Properties Trust ("ACPT" or the "Company") was formed on March 17, 1997 as a real estate investment trust under Article 8 of the Maryland Trust Law.  ACPT was formed to succeed most of Interstate General Company L.P.'s ("IGC" or "Predecessor") real estate operations.

On October 5, 1998 IGC transferred to ACPT the common shares of four subsidiaries that collectively comprised the majority of the principal real estate operations and assets of IGC.  In exchange, ACPT issued to IGC 5,207,954 common shares of ACPT, all of which were distributed ("the Distribution") to the partners of IGC.  IGC distributed to its partners the 5,207,954 shares of common stock of ACPT, resulting in the division of IGC's operations into two companies.  The shares were distributed on a basis of one ACPT share for every two IGC Units and a proportionate share to IGC's general partners.

ACPT is a self-managed holding company that is primarily engaged in the investment of rental properties, community development and management services.  These operations are concentrated in the Washington, D.C. metropolitan area and Puerto Rico and are carried out through American Rental Properties Trust ("American Rental"), American Rental Management Company ("American Management"), American Land Development U.S., Inc. ("American Land") and IGP Group Corp. ("IGP Group") and their subsidiaries.  ACPT is taxed as a partnership.  American Rental, American Management and American Land are taxed as U.S. Corporations and IGP Group's income is subject to Puerto Rico income taxes.

|(2) | BASIS OF PRESENTATION AND PRINCIPLES OF ACCOUNTING
|--- | --------------------------------------------------

The accompanying consolidated financial statements include the accounts of American Community Properties Trust and its majority owned and controlled subsidiaries and partnerships, after eliminating all intercompany transactions. All of the entities included in the consolidated financial statements are hereinafter referred to collectively as the "Company" or "ACPT".

The accompanying consolidated financial statements are unaudited but include all adjustments (consisting of normal recurring adjustments) which the Company's management considers necessary for a fair presentation of the results of operations for the interim periods. The operating results for the nine months ended September 30, 2002 are not necessarily indicative of the results that may be expected for the year.  Net income per share is calculated based on weighted average shares outstanding.  Weighted average shares were adjusted during the three and nine months ended September 30, 2002 and 2001 to reflect dilutive common shares related to outstanding warrants.

The Company's management agreements require the rental partnerships to pay a management fee plus reimburse the Company for certain payroll and out of pocket expenses incurred on behalf of the partnerships.  Consistent with EITF Topic D-103, "Income Characterization of Reimbursements Received for Out of Pocket Expenses Incurred", which became effective January 1, 2002, the Company has presented these reimbursements as revenues.

These unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and note disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles ("GAAP") have been condensed or omitted.  While Management believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these financial statements be read in conjunction with the financial statements and the notes included in the Company's Annual Report filed on Form 10-K for the year ended December 31, 2001.

|(3) | INVESTMENT IN UNCONSOLIDATED PARTNERSHIPS
|--- | -----------------------------------------

Apartment Partnerships

The following information summarizes financial data and principal activities of unconsolidated apartment partnerships, which the Company accounts for under the equity method.  The information is presented to segregate operating properties from the two projects that were converted and sold as condominiums (in thousands):

|                                            | Operating    |  | Condo                 |  |               
|------------------------------------------- | ------------ |  | --------------------- |  | --------------
|                                            | Properties   |  | Conversions           |  | Total         
|Summary Financial Position:                 |              |  |                       |  |               
|Total Assets                                |              |  |                       |  |               
|September 30, 2002                          | $     87,070 |  | $                  50 |  | $       87,120
|December 31, 2001                           | 88,733       |  | 79                    |  | 88,812        
|Total Non-Recourse Debt                     |              |  |                       |  |               
|September 30, 2002                          | 96,029       |  | -                     |  | 96,029        
|December 31, 2001                           | 98,400       |  | -                     |  | 98,400        
|Total Other Liabilities                     |              |  |                       |  |               
|September 30, 2002                          | 11,230       |  | 12                    |  | 11,242        
|December 31, 2001                           | 10,841       |  | 29                    |  | 10,870        
|Total Equity                                |              |  |                       |  |               
|September 30, 2002                          | (20,189)     |  | 38                    |  | (20,151)      
|December 31, 2001                           | (20,508)     |  | 50                    |  | (20,458)      
|Company's Investment                        |              |  |                       |  |               
|September 30, 2002                          | 8,968        |  | 44                    |  | 9,012         
|December 31, 2001                           | 8,350        |  | 102                   |  | 8,452         
|                                            |              |  |                       |  |               
|Summary of Operations:                      |              |  |                       |  |               
|Total Revenue                               |              |  |                       |  |               
|Three Months Ended September 30, 2002       | 7,095        |  | -                     |  | 7,095         
|Three Months Ended September 30, 2001       | 7,099        |  | 9                     |  | 7,108         
|Nine Months Ended September 30, 2002        | 21,074       |  | -                     |  | 21,074        
|Nine Months Ended September 30, 2001        | 21,036       |  | 785                   |  | 21,821        
|Net Income (Loss)                           |              |  |                       |  |               
|Three Months Ended September 30, 2002       | 331          |  | (1)                   |  | 330           
|Three Months Ended September 30, 2001       | 506          |  | (36)                  |  | 470           
|Nine Months Ended September 30, 2002        | 1,396        |  | (12)                  |  | 1,384         
|Nine Months Ended September 30, 2001        | 1,297        |  | 80                    |  | 1,377         
|Company's recognition of equity in earnings |              |  |                       |  |               
|And developer fees                          |              |  |                       |  |               
|Three Months Ended September 30, 2002       | 288          |  | -                     |  | 288           
|Three Months Ended September 30, 2001       | 353          |  | (18)                  |  | 335           
|Nine Months Ended September 30, 2002        | 954          |  | (57)                  |  | 897           
|Nine Months Ended September 30, 2001        | 1,046        |  | 40                    |  | 1,086         



|                                      | Operating  |  | Condo       |  |      
|------------------------------------- | ---------- |  | ----------- |  | -----
|                                      | Properties |  | Conversions |  | Total
|Summary of Cash Flows:                |            |  |             |  |      
|Cash flows from operating activities  |            |  |             |  |      
|Three Months Ended September 30, 2002 | 1,331      |  | 1           |  | 1,332
|Three Months Ended September 30, 2001 | 1,532      |  | (72)        |  | 1,460
|Nine Months Ended September 30, 2002  | 4,135      |  | (26)        |  | 4,109
|Nine Months Ended September 30, 2001  | 4,378      |  | 196         |  | 4,574
|Company's share of cash flows from    |            |  |             |  |      
|Operating activities                  |            |  |             |  |      
|Three Months Ended September 30, 2002 | 506        |  | -           |  | 506  
|Three Months Ended September 30, 2001 | 604        |  | (36)        |  | 568  
|Nine Months Ended September 30, 2002  | 1,602      |  | (13)        |  | 1,589
|Nine Months Ended September 30, 2001  | 1,719      |  | 98          |  | 1,817
|Operating cash distributions          |            |  |             |  |      
|Three Months Ended September 30, 2002 | 474        |  | -           |  | 474  
|Three Months Ended September 30, 2001 | 110        |  | -           |  | 110  
|Nine Months Ended September 30, 2002  | 1,076      |  | -           |  | 1,076
|Nine Months Ended September 30, 2001  | 1,094      |  | 1,300       |  | 2,394
|Company's share of cash distributions |            |  |             |  |      
|Three Months Ended September 30, 2002 | 238        |  | -           |  | 238  
|Three Months Ended September 30, 2001 | 110        |  | -           |  | 110  
|Nine Months Ended September 30, 2002  | 492        |  | -           |  | 492  
|Nine Months Ended September 30, 2001  | 468        |  | 650         |  | 1,118

The unconsolidated apartment partnerships as of September 30, 2002 include 15 partnerships owning 3,767 rental units situated in 18 apartment complexes.  These complexes are owned by Alturas Del Senorial Associates Limited Partnership, Bannister Associates Limited Partnership, Bayamon Gardens Associates Limited Partnership, Brookside Gardens Limited Partnership, Carolina Associates Limited Partnership, Colinas de San Juan Associates Limited Partnership, Crossland Associates Limited Partnership, Essex Apartments Associates Limited Partnership, Huntington Associates Limited Partnership, Jardines de Caparra Associates Limited Partnership, Lakeside Apartments Limited Partnership, Monserrate Associates Limited Partnership, San Anton Associates Limited Partnership, Turabo Limited Dividend Partnership and Valle del Sol Limited Partnership.  In addition, the Company holds an ownership interest in a partnership, New Center Associates Limited Partnership, whose rental units were converted into condominiums, all of which have been sold.  When all the affairs of this partnership are concluded, the partnership will be liquidated.  The Company holds a general partner interest in these partnerships and generally shares in zero to 5% of profits, losses and cash flow from operations until such time as the limited partners have received cash distributions equal to their capital contributions.  Thereafter, the Company generally shares in 50% of cash distributions from operations.  Pursuant to certain partnership agreements, the general partners of the unconsolidated partnerships are prohibited from selling or refinancing the apartment complexes without majority limited partner approval.  Due to the absence of control and/or non-majority ownership, these partnerships are accounted for under the equity method of accounting.



Unconsolidated Commercial Property Partnership

In December 1998, the Company obtained a limited partner interest in ELI, S.E. ("ELI"), a partnership formed for the purpose of constructing a building to lease to the State Insurance Fund of the Government of Puerto Rico.  ACPT contributed the land in exchange for $700,000 and 27.82% ownership interest in the partnership's assets equal to producing a 45.26% interest in cash flow generated by the thirty-year lease of the building. The following tables summarize ELI's financial information (in thousands):

|SUMMARY OF FINANCIAL POSITION:              |                     |  |                      |  |               |  |             
|------------------------------------------- | ------------------- |  | -------------------- |  | ------------- |  | ------------
|                                            | As of               |  |                      |  |              
|                                            | September 30,       |  | December 31,         |  |               |  |             
|                                            | 2002                |  | 2001                 |  |               |  |             
|                                            |                     |  |                      |  |               |  |             
|Total assets                                | $           29,453  |  | $          28,837    |  |               |  |             
|Total liabilities                           | 26,292              |  | 25,907               |  |               |  |             
|Total equity                                | 3,161               |  | 2,930                |  |               |  |             
|Company's investment                        | 5,126               |  | 5,021                |  |               |  |             
|                                            |                     |  |                      |  |               |  |             
|                                            |                     |  |                      |  |               |  |             
|SUMMARY OF OPERATIONS:                      |                     |  |                      |  |               |  |             
|                                            | For the Nine Months |  | For the Three Months
|                                            | Ended September 30, |  | Ended September 30, 
|                                            | 2002                |  | 2001                 |  | 2002          |  | 2001        
|                                            |                     |  |                      |  |               |  |             
|Total revenue                               | $             2,741 |  | $            2,791   |  | $         895 |  | $        915
|Net income                                  | 1,244               |  | 1,347                |  | 416           |  | 410         
|Company's recognition of equity in earnings | 564                 |  | 609                  |  | 188           |  | 185         
|                                            |                     |  |                      |  |               |  |             
|                                            |                     |  |                      |  |               |  |             
|SUMMARY OF OPERATING                        |                     |  |                      |  |               |  |             
|CASH FLOWS:                                 |                     |  |                      |  |               |  |             
|                                            | For the Nine Months |  | For the Three Months
|                                            | Ended September 30, |  | Ended September 30, 
|                                            | 2002                |  | 2001                 |  | 2002          |  | 2001        
|                                            |                     |  |                      |  |               |  |             
|Cash flows from operating activities        | $             1,605 |  | $            1,257   |  | $         662 |  | $        856
|Company's share of cash flows               |                     |  |                      |  |               |  |             
|from operating activities                   | 728                 |  | 569                  |  | 301           |  | 388         
|Operating cash distributions                | 1,013               |  | 1,838                |  | 339           |  | 355         
|Company's share of operating                |                     |  |                      |  |               |  |             
|cash distributions                          | 459                 |  | 840                  |  | 153           |  | 168         





|(4) | DEBT
|--- | ----

The Company's outstanding debt is collateralized primarily by land, land improvements, housing, receivables, investments in partnerships, and rental properties.  The following table summarizes the indebtedness of the Company at September 30, 2002 and December 31, 2001 (in thousands):

|                                  | Maturity  |  | Interest     |                  | Outstanding     
|--------------------------------- | --------- |  | ------------ | ---------------- | ----------------
|                                  | Dates     |  | Rates (a)    |                  | September 30,   
|                                  | From/To   |  | From/To      |                  | 2002            
|Related to community development: |           |  |              |                  |                 
|Recourse debt                     | 02-28-03/ |  | Non-interest | $         34,559 |                 
|                                  | 02-15-06  |  | bearing/6%   |                  |                 
|                                  |           |  |              |                  |                 
|Related to homebuilding:          |           |  |              |                  |                 
|Recourse debt                     | 08-31-03  |  | P            |                  | 11,673          
|                                  |           |  |              |                  |                 
|Related to investment properties: |           |  |              |                  |                 
|Recourse debt                     | 12-15-02  |  | 5.12%        |                  | 109             
|Non-recourse debt                 | 10-01-19/ |  | 6.6%/        |                  | 36,606          
|                                  | 10-01-28  |  | 7.75%        |                  |                 
|General:                          |           |  |              |                  |                 
|Recourse debt                     | 02-01-03/ |  | 5.9%/        |                  | 447             
|                                  | 02-01-06  |  | 18.5%        |                  |                 
|Total debt                        |           |  |              |                  | $         83,394



As of September 30, 2002, the $34,559,000 of recourse debt related to community development assets is fully collateralized by substantially all the community development assets. The non-recourse investment properties debt is collateralized by apartment projects and secured by the Federal Housing Administration ("FHA") or the Maryland Housing Fund.  Mortgage notes payable of $6,524,000 have stated interest rates of 7.5% and 7.75%; however, after deducting interest subsidies provided by HUD, the effective interest rate over the life of the loans is 1%. The Company's loans contain various financial, cross collateral, cross default, technical and restrictive provisions.  As of September 30, 2002 the Company is in compliance with the provisions of its loan agreements.





|(5) | RELATED PARTY TRANSACTIONS
|--- | --------------------------

ACPT, certain officers and trustees of ACPT, IGC and a general partner of IGC, Interstate Business Corporation ("IBC"), have ownership interests in various entities that conduct business with the Company.  The financial impact of the related party transactions on the accompanying consolidated financial statements are reflected below (in thousands):

|CONSOLIDATED STATEMENT OF INCOME:                     |      |  |                   |  |                    |  |                   |              |                
|----------------------------------------------------- | ---- |  | ----------------- |  | ------------------ |  | ----------------- | ------------ | ---------------
|                                                      |      |  | Nine Months Ended |  | Three Months Ended
|                                                      |      |  | September 30,     |  | September 30,     
|                                                      |      |  | 2002              |  | 2001               |  | 2002              |              | 2001           
|Management and Other Fees (A)                         |      |  |                   |  |                    |  |                   |              |                
|Unconsolidated subsidiaries with third party partners |      |  | $     1,328       |  | $    1,380         |  | $            446  |              | $          473 
|Affiliates of James Michael Wilson, CEO and Trustee   |      |  | 657               |  | 659                |  | 220               |              | 259            
|                                                      |      |  | $     1,985       |  | $    2,039         |  | $            666  |              | $          732 
|Interest and Other Income                             |      |  |                   |  |                    |  |                   |              |                
|Unconsolidated subsidiaries with third party partners |      |  | $          37     |  | $         37       |  | $              13 |              | $            12
|                                                      |      |  | $          37     |  | $         37       |  | $              13 |              | $            12
|General and Administrative Expense                    |      |  |                   |  |                    |  |                   |              |                
|Affiliates of James Michael Wilson, CEO and Trustee   | (B1) |  | $        315      |  | $       292        |  | $            125  |              | $          103 
|Reserve additions and other write-offs-               |      |  |                   |  |                    |  |                   |              |                
|Unconsolidated subsidiaries with third party partners | (A)  |  | (21)              |  | 3                  |  | (10)              |              | 3              
|Reimbursement to IBC for ACPT's share of              |      |  |                   |  |                    |  |                   |              |                
|J. Michael Wilson's salary                            |      |  | 145               |  | 68                 |  | 45                |              | 23             
|Reimbursement of administrative costs-                |      |  |                   |  |                    |  |                   |              |                
|Affiliates of James Michael Wilson, CEO and Trustee   |      |  | 4                 |  | (39)               |  | 3                 |              | (9)            
|IGC                                                   | (B4) |  | (18)              |  | (22)               |  | (5)               |              | (6)            
|James J. Wilson, IGC chairman and director            | (B3) |  | 150               |  | 150                |  | 50                |              | 50             
|Thomas J. Shafer, Trustee                             | (B5) |  | 32                |  | 23                 |  | 11                |              | 8              
|                                                      |      |  | $        607      |  | $       475        |  | $            219  |              | $          172 
|Interest Expense                                      |      |  |                   |  |                    |  |                   |              |                
|KEMBT Corporation                                     | (B2) |  | $          -      |  | $         89       |  | $              -  |              | $             -
|                                                      |      |  | $          -      |  | $         89       |  | $              -  |              | $             -
|                                                      |      |  |                   |  |                    |  |                   |              |                
|BALANCE SHEET IMPACT:                                 |      |  |                   |  |                    |  |                   |              |                
|                                                      |      |  |                   |  |                    |  | Balance           |              | Balance        
|                                                      |      |  |                   |  |                    |  | September 30,     | December 31,
|                                                      |      |  |                   |  |                    |  | 2002              |              | 2001           
|Assets Related to Rental Properties                   |      |  |                   |  |                    |  |                   |              |                
|Receivables-All unsecured and due on demand           |      |  |                   |  |                    |  |                   |              |                
|Unconsolidated subsidiaries with third party partners |      |  |                   |  |                    |  | $            978  |              | $          866 
|Affiliates of James Michael Wilson, CEO and Trustee   |      |  |                   |  |                    |  | 215               |              | 193            
|                                                      |      |  |                   |  |                    |  | $         1,193   |              | $       1,059  
|Other Assets                                          |      |  |                   |  |                    |  |                   |              |                
|Receivables-All due on demand                         |      |  |                   |  |                    |  |                   |              |                
|IGC                                                   | (B4) |  |                   |  |                    |  | $            169  |              | $          150 
|Affiliate of James Michael Wilson, CEO and Trustee    | (B4) |  |                   |  |                    |  | 53                |              | 77             
|IBC                                                   |      |  |                   |  |                    |  | 8                 |              | 9              
|                                                      |      |  |                   |  |                    |  | $            230  |              | $          236 
|                                                      |      |  |                   |  |                    |  |                   |              |                
|Liabilities Related to Community Development          |      |  |                   |  |                    |  |                   |              |                
|Notes payable-KEMBT Corporation                       | (B2) |  |                   |  |                    |  | $         6,629   |              | $       6,839  





(A)		Management and Other Services

The Company provides management and other support services to its unconsolidated subsidiaries and other related entities in the normal course of business.  These fees are typically collected on a monthly basis, one month in arrears.  These receivables are unsecured and due on demand.  Certain partnerships experiencing cash shortfalls have not paid timely.  These receivable balances are reserved until satisfied or the prospect of collectibility improves.  The collectibility of management fee receivables is evaluated quarterly.  Any increase or decrease in the reserves is reflected accordingly as additional expenses or recovery of such expenses.

(B)	Other

Other transactions with related parties are as follows:



|(1) | The Company rents executive office space and other property from affiliates both in the United States and Puerto Rico pursuant to leases that expire through 2005.  In management's opinion, all leases with affiliated persons are on terms at least as favorable as those generally available from unaffiliated persons for comparable property.  On April 1, 2001 IGP assumed the office space previously occupied by an affiliated company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Pursuant to the terms of IGC's restructuring, IGC retained a note receivable due from Land Development Associates S.E. ("LDA") payable from LDA's cash flow.  The note bore interest at a rate of prime plus 1.5% subject to a 6% floor and 9% ceiling with a maturity date of August 2, 2009.  Effective June 6, 2001 the LDA Note was modified in two respects: (1) Up to 28% of net proceeds from LDA land sales was to be used to make principal payments on the note, and (2) the note became non-interest bearing as of June 6, 2001.  The Company's independent Trustees unanimously approved the modification. In July 2001 IGC assigned the note to KEMBT Corporation ('KEMBT"), wholly owned by Wilson Securities Corporation, and then pledged by KEMBT as collateral for a $7,000,000 credit agreement from FirstBank Puerto Rico ('FirstBank").
In March 2002 the Company's senior management in the United States learned that in July 2001, an officer of the Company in Puerto Rico signed a letter on the stationery of LDA purportedly agreeing that an event of default under the KEMBT credit agreement would constitute an event of default under the Loan agreement between LDA and FirstBank, giving the bank the right to foreclose on collateral securing the LDA loan agreement.  The letter was not authorized by the Company's chairman or president, who had no knowledge of the letter, nor was the undertaking approved by the independent trustees of the Company as required under the Company's Declaration of Trust. After discussions with the Company, FirstBank agreed to rescind the cross-collateralization and cross-default retroactive to the date of the letterand the Company agreed that (i) The LDA Note will be secured by the collateral under LDA's loan agreement with the bank, (ii) an event of default under the LDA Note will be a default under LDA's loan agreement with the bank, (iii) upon prepayment of all or part of LDA's obligations to the bank under the LDA loan agreement a proportionate amount of the outstanding balance of the LDA Note will be paid; (iv) the due date of the LDA Note will be June 30, 2003, or such later date as shall apply to LDA's other obligations to the bank under the LDA loan agreement, and (v) at the request of the bank, LDA will prepay to the bank the outstanding balance of the LDA Note, up to the outstanding balance of the KEMBT obligation, from the proceeds of an additional credit facility provided by the bank.  In consideration of LDA's undertakings to the bank with regard to the LDA Note, entities controlled by the Wilson family have agreed: (i) to pay any and all interest on any new obligations incurred by the Company to FirstBank in full or partial extinguishment of the related party obligation to the bank; (ii) reimburse the Company for all loan fees, legal costs and other expenses incurred by the Company in connection with this matter, and (iii) to pay an annual fee of one percent of the outstanding balance of any new obligations incurred by the Company to the bank in full or partial extinguishment of the related party obligation to the bank.  The foregoing undertakings of the Wilson family are guaranteed by entities controlled by the Wilson family including James J. Wilson individually for which consulting payments to be made to him under a Consulting Agreement with the Company entered into in 1998, discussed below, are to serve as security.  In addition, the Company will receive a discount of approximately $430,000 on the LDA Note.  In connection with this transaction, Thomas B. Wilson tendered his resignation as a trustee which was accepted by the Board of Trustees on April 9, 2002, and certain disciplinary action was taken with respect to two of the Company's officers in Puerto Rico.
|(3) | Fees paid to James J. Wilson pursuant to a consulting and retirement agreement.  Effective October 5, 1998, the consulting agreement provides for annual cash payments for the first two years of $500,000 and annual cash payments for eight years thereafter of $200,000.  Currently the consulting fees are being applied to satisfy the terms of the KEMBT transaction discussed above.  At Mr. Wilson's request, any additional payments will be made to IGC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(4) | During the transition period after the Distribution, the Company provided land development, accounting, tax, human resources, payroll processing and other miscellaneous administrative support services to IGC.  After the transition period, ACPT agreed to continue to provide human resources, payroll processing and tax services to IGC on a cost reimbursement basis.  Currently the Company is providing minimal support services to IGC.  The receivables for these services and similar services provided in the past to Equus Gaming Company L.P. are guaranteed by IBC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(5) | Fees paid to Thomas J. Shafer, a trustee, pursuant to a consulting agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      





|(6) | SEGMENT INFORMATION
|--- | -------------------

The U.S. operations and Puerto Rico operations are managed as separate profit centers.  The U.S. operations include investments in rental properties, community development and management services.  The Puerto Rico operations include investments in rental properties, investments in commercial properties, community development, management services and homebuilding.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.  The following presents the segment information for the nine months ended September 30, 2002 and 2001 (in thousands):

|                                                 | United        |  | Puerto          |  | Inter-        |  |               
|------------------------------------------------ | ------------- |  | --------------- |  | ------------- |  | --------------
|                                                 | States        |  | Rico            |  | Segment       |  | Total         
|Nine Months                                      |               |  |                 |  |               |  |               
|                                                 |               |  |                 |  |               |  |               
|2002:                                            |               |  |                 |  |               |  |               
|                                                 |               |  |                 |  |               |  |               
|Total revenues                                   | $      18,563 |  | $         7,429 |  | $       (486) |  | $       25,506
|Interest income                                  | 138           |  | 712             |  | (484)         |  | 366           
|Interest expense                                 | 2,120         |  | 353             |  | (412)         |  | 2,061         
|Depreciation and amortization                    | 1,346         |  | 70              |  | -             |  | 1,416         
|Income taxes (benefit)-current                   | 711           |  | (163)           |  | -             |  | 548           
|Income taxes (benefit)-deferred                  | 704           |  | 166             |  | -             |  | 870           
|Income before income taxes and minority interest | 2,958         |  | 123             |  | (72)          |  | 3,009         
|Net income                                       | 1,339         |  | 120             |  | (72)          |  | 1,387         
|Total assets                                     | 72,632        |  | 70,702          |  | (13,785)      |  | 129,549       
|Additions to long lived assets                   | 5,248         |  | 1,704           |  | -             |  | 6,952         
|                                                 |               |  |                 |  |               |  |               
|2001:                                            |               |  |                 |  |               |  |               
|                                                 |               |  |                 |  |               |  |               
|Total revenues                                   | $      16,896 |  | $       11,213  |  | $       (620) |  | $       27,489
|Interest income                                  | 98            |  | 1,066           |  | (620)         |  | 544           
|Interest expense                                 | 2,895         |  | 710             |  | (560)         |  | 3,045         
|Depreciation and amortization                    | 1,263         |  | 89              |  | -             |  | 1,352         
|Income taxes (benefit)-current                   | 279           |  | 907             |  | -             |  | 1,186         
|Income taxes (benefit)-deferred                  | 414           |  | (306)           |  | -             |  | 108           
|Income before income taxes and minority interest | 2,267         |  | 2,634           |  | (60)          |  | 4,841         
|Net income                                       | 1,315         |  | 2,033           |  | (60)          |  | 3,288         
|Total assets                                     | 73,491        |  | 63,501          |  | (12,654)      |  | 124,338       
|Additions to long lived assets                   | 3,815         |  | 4,337           |  | -             |  | 8,152         



The accounting policies of the segments are the same as those described in the summary of significant accounting policies.  The following presents the segment information for the three months ended September 30, 2002 and 2001 (in thousands):

|                                                 | United         |  | Puerto          |  | Inter-        |  |                
|------------------------------------------------ | -------------- |  | --------------- |  | ------------- |  | ---------------
|                                                 | States         |  | Rico            |  | Segment       |  | Total          
|Three Months                                     |                |  |                 |  |               |  |                
|                                                 |                |  |                 |  |               |  |                
|2002:                                            |                |  |                 |  |               |  |                
|                                                 |                |  |                 |  |               |  |                
|Total revenues                                   | $        6,171 |  | $         3,458 |  | $       (166) |  | $         9,463
|Interest income                                  | 50             |  | 221             |  | (164)         |  | 107            
|Interest expense                                 | 687            |  | 105             |  | (140)         |  | 652            
|Depreciation and amortization                    | 448            |  | 18              |  | -             |  | 466            
|Income taxes (benefit)-current                   | 356            |  | (84)            |  | -             |  | 272            
|Income taxes (benefit)-deferred                  | 35             |  | 103             |  | -             |  | 138            
|Income before income taxes and minority interest | 1,054          |  | 218             |  | (24)          |  | 1,248          
|Net income                                       | 597            |  | 199             |  | (24)          |  | 772            
|Total assets                                     | 72,632         |  | 70,702          |  | (13,785)      |  | 129,549        
|Additions to long lived assets                   | 1,813          |  | 603             |  | -             |  | 2,416          
|                                                 |                |  |                 |  |               |  |                
|2001:                                            |                |  |                 |  |               |  |                
|                                                 |                |  |                 |  |               |  |                
|Total revenues                                   | $        5,370 |  | $         8,029 |  | $       (224) |  | $       13,175 
|Interest income                                  | 65             |  | 287             |  | (224)         |  | 128            
|Interest expense                                 | 936            |  | 193             |  | (182)         |  | 947            
|Depreciation and amortization                    | 422            |  | 24              |  | -             |  | 446            
|Income taxes (benefit)-current                   | 92             |  | 581             |  | -             |  | 673            
|Income taxes (benefit)-deferred                  | (70)           |  | (54)            |  | -             |  | (124)          
|Income before income taxes and minority interest | 297            |  | 2,063           |  | (42)          |  | 2,318          
|Net income                                       | 201            |  | 1,536           |  | (42)          |  | 1,695          
|Total assets                                     | 73,491         |  | 63,501          |  | (12,654)      |  | 124,338        
|Additions to long lived assets                   | 1,530          |  | 1,758           |  | -             |  | 3,288          





|ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

General:

Historically, the Company's financial results have been significantly affected by the cyclical nature of the real estate industry.  Accordingly, the Company's historical financial statements may not be indicative of future results.

For the Nine Months Ended September 30, 2002 and 2001

U.S.

Community Development Operations.

During the first nine months of 2002, 47 standard size single-family lots were sold for an average sales price of $53,000, 49 small single-family lots for an average sales price of $43,000 and 20 townhome lots for an average sales price of $35,000, compared to 71 standard size family lots sold for an average sales price of $51,000 and 20 townhome lots sold for an average sales price of $33,000 during the same period of 2001.  The residential lot prices increased pursuant to the escalation provisions in the sales contracts.  During the first nine months of 2002, 13 acres of commercial land were sold for an average sales price of $2.83 per square foot compared to 27 acres sold for an average sales price of $2.79 per square foot during the first nine months of 2001.  The average sales price of these parcels differs due to their location, use and level of development.

During 2002, the Company received a $350,000 note as partial payment toward a $1,600,000 commercial sale and the remainder in cash.  The note is personally guaranteed by the purchaser and a deed of trust subordinate to an acquisition and construction loan.  Per the terms of the deed of trust, the purchaser is required to subdivide the property and obtain a release from the acquisition loan eliminating the subordination on a one-acre out parcel.  The sale was recorded using the cost recovery method requiring the full amount of the note to be deferred for revenue recognition purposes in the second quarter of 2002.

The combined gross profit margin for the nine months ended September 30, 2002 decreased to 28%, compared to 31% in the same period of 2001.  The decrease was primarily attributable to the $350,000 deferred revenue and the mix of sales between residential and commercial.  The average gross profit on commercial sales during the first nine months of 2002 was 51% compared to 46% in the first nine months of 2001.  This increase is primarily attributable to use and location of the land.  The significant parcel sold in 2002 is located in an existing developed area for a small commercial center anchored with a major chain grocery store compared to the large parcel sold in 2001 located next to a landfill.  Fairway Village's residential lot sales gross margin increased 1.8% to 31% as a direct reflection of the increase in the lot sales prices.

Rental Property Revenues and Operating Results.

The Company's share of the consolidated housing partnerships' net income (rental property revenue net of operating expenses, interest expense, depreciation and amortization and minority interest) increased 17% to $1,593,000 for the nine months ended September 30, 2002, compared to $1,360,000 in the same period in 2001.  The increase is primarily due to a 6% increase in rental revenue, 10% reduction in interest expense, 21% reduction in minority interest, offset in part by a 15% increase in operating expenses and a 2% increase in depreciation and amortization.  The increase in rental revenue is a result of increased rental rates primarily in non-subsidized properties.  The increase in operating expenses is primarily attributable to a 102% increase in hazard insurance premium effective October 1, 2001 and increased maintenance costs.  In addition, New Forest Apartments incurred a $25,000 loss, the insurance deductible, when four units were damaged by fire.

Equity in Earnings from Partnerships and Developer Fees.

Equity in earnings decreased 35% to $447,000 during the first nine months of 2002, compared to $684,000 during the first nine months of 2001.  The decrease is primarily attributable to the combined effect of reduced developer fees and the reduction in earnings from the partnerships. Sponsor and development fees reduce annually as they are amortized.  In addition, the deferred developer fee of one partnership was fully amortized during 2001.  The combined effect resulted in a $133,000 decrease in revenue recognized in the first nine months of 2002.  The earnings from the partnerships were down due to a $25,000 fire loss at Huntington Apartments, increased insurance premiums and repair expenses during 2002 combined with a timing difference of a retroactive rent increase pursuant to a subsidy contract recognized in 2001. These decreases were partially offset by increased rental rates primarily in non-subsidized properties.

Management and Other Fees.

Management and other fees increased 11% to $985,000 in the first nine months of 2002, compared to $885,000 in the same period in 2001. The Company purchased a new fully integrated computer system that provides the managed properties with a more efficient way to process subsidy contracts and other basic property functions.  The properties are charged additional fees for their portion of the additional costs related to these new computer services generating increased management and other fees in 2002.  In addition, management fees increased due to a modification to the management contract with one non-owned partnership increasing the management fee and increased rents during the nine months ended September 30, 2002, compared to the nine months ended September 30, 2001.

Interest Expense.

Interest expense decreased 54% to $504,000 during the nine months ended September 30, 2002, compared to $1,097,000 for the nine months ended September 30, 2001.  This decrease is primarily attributable to the overall reduction in the prime lending interest rate, refinanced debt at a reduced interest rate and a $3,129,000 decrease in outstanding debt during the first nine months of 2002 compared to the first nine months of 2001.

General and Administrative Expense.

General and administrative expenses decreased 17%, to $1,724,000 for the nine months ended September 30, 2002, compared to $2,069,000 for the same period of 2001. The decrease is attributable to an increase in allocated corporate costs charged to the Puerto Rico operations, a reduction in group insurance, the recovery of a note receivable previously written off as uncollectible, and the effect of the decrease in the Company's stock price on outstanding share incentive rights.  During 2002, the corporate staff located at the St. Charles, Maryland office provided additional services to the Puerto Rico operations.  The decreases in general and administrative expense was offset in part by increased compensation expense, stock exchange fees and board of trustee fees, compared to the first nine months in 2001.



Puerto Rico

Community Development Operations.

There was no community development land sales revenue during the nine months ended September 30, 2002, compared to sales of $6,813,000 during the nine months ended September 30, 2001.   During the nine months of 2001, sales revenue was reduced by $227,000 to reflect the discount for the imputed interest on a note taken as partial payment for the sale of a parcel of 220 condominium units.   During the same period, one parcel was transferred to our wholly owned subsidiary to construct and sell 208 units.  Residential lots in Puerto Rico are sold in bulk and, like commercial sales, are cyclical in nature.

The gross profit margin for sales during the nine months ended September 30, 2001, was 27%.  During the first nine months of 2001, the Company incurred $169,000 of costs associated with the clean up of unsuitable materials located beneath the surface of a parcel sold in 2000.  In addition, the Company paid to a contractor $699,000 for cost overruns at issue in the Wal-Mart litigation.  In February 2002, the Company paid Wal-Mart $233,000 for additional cost overruns resolving this litigation.

The maturity date of a $5,632,000 note receivable related to a 2001 land sale was extended from March 31, 2002 to December 31, 2002 upon receipt of a $2,000,000 principal payment in August 2002.

Homebuilding Operations.

During September 2002, the first eight units in Brisas de Parque Escorial closed generating $1,395,000 of sales revenue.  As of September 30, 2002, 45 units were under contract with an average sales price of $172,000.  These sales are backed by a $4,000 deposit and non-contingent sales contract.  The gross profit for the period was 19%.  There were no home sales during 2001.

Equity in Earnings from Partnerships and Developer Fees.

Equity in earnings from partnerships increased less than one percent to $1,014,000 during the first nine months of 2002, compared to $1,011,000 during the first nine months of 2001.  The increase in earnings from partnerships is primarily a result of increased rents, reduced vacancies, reduced operating and financial expenses, offset in part by increased insurance premiums.  This increase in earnings from partnerships was partially offset by the reduction in earnings from ELI, S.E. and in sponsor and developer fees amortization.



Management and Other Fees.

Management and other fees decreased by 6% to $1,400,000 during the nine months ended September 30, 2002, compared to $1,491,000 for the nine months ended September 30, 2001.  The decrease is primarily attributable to special management fees recognized during the nine months of 2001 from the two partnerships that converted their rental units into condominiums, all of which have been sold.  Also, during the nine months of 2001, additional management fees were earned as the result of a HUD authorized adjustment to the gross income of various non-owned properties.  There were no similar fees in 2002.  These decreases were partially offset by management fees received from the property owner associations in Parque Escorial with no comparable fees earned during the nine months of 2001.

Gain from Expropriation.

During the nine months ended September 30, 2001, the Puerto Rico Highway Authority ("PRHA") and the Company executed a settlement agreement as a final condemnation award on 54 cuerdas expropriated located in Parque El Comandante.   The agreement increased the condemnation award per cuerda to $35,000 and provided for the payment of interest on the additional condemnation award from the date of expropriation in 1998.  This transaction resulted in a $630,000 gain and the recognition of $152,000 of interest accrued through September 30, 2001.  There were no similar transactions during the comparable period in 2002.

Interest Expense.

Interest expense decreased 50% to $353,000 during the first nine months of 2002, compared to $710,000 during the same period in 2001.  The decrease is primarily attributable to the reduced outstanding debt balance and the overall reduction in the prime lending rate.

General and Administrative Expense.

General and administrative expenses increased 4% to $2,910,000 during the nine months ended September 30, 2002, compared to $2,787,000 for the nine months ended September 30, 2001.  The increase is primarily attributable to the increase in the corporate cost allocation during 2002.  Due to staffing changes and certain transactions, the Puerto Rico staff received additional support from the corporate office.  This increase was partially offset by reduced compensation expense and consulting fees combined with the additional municipal taxes from prior years recognized in 2001.

For the Three Months Ended September 30, 2002 and 2001

U.S.

Community Development Operations.

Community development land sales revenue decreased $68,000 to $2,186,000 during the three months ended September 30, 2002, compared to sales revenue of $2,254,000 during the three months ended September 30, 2001.  During the third quarter of 2002, 25 standard size single-family lots were sold for an average sales price of $54,000, 16 small single-family lots for an average sales price of $44,000 and 4 townhome lots for an average sales price of $35,000, compared to 27 standard size single-family lots sold for an average sales price of $51,000 and 14 townhome lots for an average sales price of $33,000 during the third quarter of 2001.  During the third quarter of 2001, 1 acre of commercial land was sold for a sales price of $12 per square foot, with no comparable sale in the third quarter of 2002.

The gross profit margin for the three months ended September 30, 2002 increased 4% to 23% from 19% in the same period of 2001.  The increase was primarily attributable to the increase in the residential lot sales prices and a 4.9% decrease in the period cost incurred during the third quarter of 2002 offset by an 8% increase in the expected cost to complete the development of the Huntington Ridge townhome lots.

Rental Property Revenues and Operating Results.

The Company's share of the consolidated housing partnerships' net income (rental property revenue net of operating expenses, interest expense, depreciation and amortization and minority interest) increased 37% to $553,000 for the three months ended September 30, 2002, compared to $404,000 in the same period in 2001.  The increase is primarily attributable to a 9% increase in rental revenue, 9% reduction in interest expense, 11% reduction in minority interest, offset in part by a 13% increase in operating expenses and a 2% increase in depreciation and amortization.  The supply of housing in Charles County has been tight in 2002, allowing the steady rent increases in our non-subsidized rental properties. The increase in operating expenses is primarily due to a 102% increase in insurance premiums. Increases in insurance costs are expected to continue for 2003.

Equity in Earnings from Partnerships and Developer Fees.

Equity in earnings decreased 40% to $119,000 during the three months ended September 30, 2002, compared to $199,000 during the three months ended September 30, 2001.  This decrease is primarily attributable to a $44,000 reduction in the recognition of developer fees during the third quarter of 2002, compared to the third quarter of 2001 and fire damage to 38 units in one apartment complex.

Management and Other Fees.

Management and other fees increased 15% to $350,000 for the three months ended September 30, 2002, compared to $304,000 in the same period in 2001.  The Company purchased a new fully integrated computer system that provides managed properties with a more efficient way to process subsidy contracts and other basic property functions.  The properties are charged a fee for their portion of the additional costs related to these new computer services, generating increased management and other fees in 2002.  In addition, management fees increased due to a modification to the management contract with one non-owned partnership increasing the management fee and to an overall increase in rents.

Interest Expense

Interest expense decreased $200,000 to $150,000 during the three months ended September 30, 2002, compared to $350,000 for the three months ended September 30, 2001.  This decrease is primarily due to the decrease in outstanding loan balances and the prime lending interest rate during the third quarter of 2002 compared to the third quarter of 2001.

General and Administrative Expense.

General and administrative expenses decreased 42%, to $392,000 for the three months ended September 30, 2002, compared to $680,000 for the same period of 2001. The reduction is primarily attributable to the recovery of a note receivable previously written off as uncollectible and increased corporate costs allocated to the Puerto Rico operations during the third quarter 2002, compared to the same period in 2001 and the effect of the decrease in the Company's stock price during the third quarter of 2002 on compensation expense recorded related to outstanding share incentive rights.

Puerto Rico

Community Development Operations.

There were no land sales during the third quarter of 2002, compared to sales of $6,813,000 during the third quarter of 2001.  During the third quarter of 2001, the Company sold land for 220 condominium units at $32,000 per unit.  The revenue recognized was discounted by the imputed interest on the note taken back for 80% of the sales price, $5,632,000.  During the same period, the Company transferred one parcel to a wholly owned subsidiary to construct and sell 208 units.

The gross profit margin for the sale during the third quarter of 2001 was 27%.    During the same period of 2001, the Company agreed to pay a contractor $699,000 for cost overruns at issue in the Wal-Mart litigation.

Homebuilding Operations.

During September 2002, the first eight units in Brisas de Parque Escorial closed generating $1,395,000 of sales revenue.  As of September 30, 2002, 45 units were under contract with an average sales price of $172,000.  These sales are backed by a $4,000 deposit and non-contingent sales contract.  The gross profit for the three months was 19%.

Equity in Earnings from Partnerships and Developer Fees.

Equity in earnings increased 11% to $357,000 during the three months ended September 30, 2002, compared to $321,000 during the three months ended September 30, 2001.  The increase is primarily attributable to an increase in earnings generated by the rental properties due to increased rents, reduced repairs and maintenance, reduced interest expense, offset in part by increased insurance premiums.

Management and Other Fees.

Management and other fees decreased 10% to $476,000 during the three months ended September 30, 2002, compared to $529,000 for the three months ended September 30, 2001.  The decrease is primarily attributable to additional management fees earned during the third quarter of 2001 as the result of a HUD authorized adjustment to the gross income of various non-owned properties and the reduction of management fees from a commercial non-owned property due to the loss of a major tenant.  These decreases were partially offset with management fees received from property owner associations in Parque Escorial with no comparable fees earned during the three months ended September 30, 2001.

Interest Expense.

Interest expense decreased 46% to $104,000 during the third quarter of 2002, compared to $193,000 during the same period in 2001.  This decrease is primarily attributable to the overall reduction in the prime-lending rate during the third quarter of 2002, compared to the same quarter of 2001.

General and Administrative Expense.

General and administrative expenses increased less than one percent to $959,000 during the three months ended September 30, 2002, compared to $955,000 for the three months ended September 30, 2001.  The increase is primarily attributable to the increase in the corporate expense allocation to the Puerto Rico operations during the third quarter of 2002.  This increase was partially offset by reduced compensation expense and transfer of guard and other services provided Parque Escorial to the property owner associations.

Liquidity and Capital Resources

Cash and cash equivalents were $3,107,000 and $4,871,000 at September 30, 2002 and December 31, 2001, respectively.  This decrease was attributable to $7,446,000 used in investing activities, offset by $1,768,000 provided by financing activities and $3,914,000 provided by operations.  The cash outflow for investing activities was primarily attributable to $5,776,000 of land improvements put in place for future land sales. During the first nine months of 2002, $9,615,000 of debt repayments was made compared to $11,383,000 of debt advances received.  The cash outflow from operating activities was primarily $8,271,000 of improvements to the condominium project in Parque Escorial.  Sales commenced in the third quarter of 2002.

The Company and the Charles County commissioners have reached a settlement that will provide guaranteed school allocation permits for 255 new dwelling units per year, cumulative through December 2005; sewer connection fees for the next 2000 units in Fairway Village, $1,608 less per unit than the fee charged builders outside of St. Charles; a refund to ACPT's predecessor for certain water and sewer fees previously paid; and the possibility of annexing additional contiguous land to St. Charles.  The County agreed to issue general obligation bonds to finance the construction of certain infrastructure needed to develop St. Charles.  In exchange, the Company agreed to provide letters of credit to secure the bonds and accelerate the construction of two major roadway links to the Charles County road system and dismiss all pending water and sewer litigation.

In 1999 the Company sold land intended for the development of a 1650-megawatt power plant.  Pursuant to the Contract of Sale, the purchaser entered into a Utility Agreement, which required them to provide funding for certain infrastructure that would benefit Fairway Village and other land in St. Charles.  Due to the decrease in capital funds available to the energy industry, the purchaser has delayed their development plans and is seeking an extension to their contract in order that they may pursue this power plant when the financial climate changes.  In response to this delay, the Company's outside engineers are designing a temporary pump station and other utilities that will accommodate development in St. Charles over the next 5 years.  In the event the purchaser does not pursue the construction of the power plant, the County has agreed to provide financing for this infrastructure as part of the settlement agreement discussed above.

The Company has historically met its liquidity requirements from cash flow generated from residential and commercial land sales, property management fees, distributions from residential rental partnerships and from bank financing providing funds for development and working capital.  The Company has sufficient loans in place to develop the projects currently underway in St. Charles and Parque Escorial.

The Company's principal demands for liquidity are expected to be the continued funding of its current debt service, development costs in Fairway Village and Parque Escorial and other normal operating costs.  The Company does not expect to generate significant cash flows in excess of its existing obligations. Anticipated cash from operations, new and existing financing facilities, and extension or refinancing of $38,387,000 of required principal payments and loans that mature in the next twelve months are expected to meet the Company's financial requirements for the year.  However, there are no assurances that these expectations will be met.



Debt Summary

Substantially all of ACPT's assets are encumbered by approximately $47,000,000 of recourse debt and $37,000,000 of non-recourse debt.  The non-recourse debt is attributable to the mortgages of consolidated rental property partnerships.  The significant terms of ACPT's other debt financing arrangements are shown below (dollars in thousands):

|                                |                     |  |          |  |          |  | Balance             
|------------------------------- | ------------------- |  | -------- |  | -------- |  | --------------------
|                                | Maximum             |  | Interest |  | Maturity |  | Outstanding         
|                                | Borrowings          |  | Rate (a) |  | Date     |  | 9/30/02             
|                                |                     |  |          |  |          |  |                     
|SouthTrust                      | $             6,000 |  | P+.75%   |  | 11/26/04 |  | $              6,000
|First Bank-phase III            | 4,589               |  | P+1.0%   |  | 6/30/03  |  | 2,090               
|First Bank-office park          | 4,961               |  | P+1.0%   |  | 6/30/03  |  | 4,961               
|First Bank-working capital loan | 5,474               |  | P+1.0%   |  | 6/30/03  |  | 5,474               
|First Bank-homebuilding         | 23,710              |  | P        |  | 8/31/03  |  | 11,673              
|The Columbia Bank               | 3,500               |  | P+1.25%  |  | 2/15/06  |  | 3,500               
|The Columbia Bank               | 2,000               |  | P+1.25%  |  | 8/15/04  |  | 909                 
|The Columbia Bank               | 2,500               |  | P+1.25%  |  | 10/15/04 |  | 596                 
|BankTrust                       | 109                 |  | 5.12%    |  | 12/15/02 |  | 109                 
|Banco Popular                   | 4,400               |  | P+1.0%   |  | 2/28/03  |  | 4,400               
|KEMBT Corporation               | 6,629               |  | N/A      |  | 6/30/03  |  | 6,629               
|Other miscellaneous             | 447                 |  | Various  |  | Various  |  | 447                 
|                                | $           64,319  |  |          |  |          |  | $            46,788 



On August 7, 2002, the Company closed a $2,000,000 development loan for the next parcel in Fairway Village.  The Banco Popular loan due on July 31, 2002 was extended until February 28, 2003 in exchange for a $11,000 loan fee and $200,000 principal curtailment.  Management expects to refinance this loan through another lender prior to its maturity date.

On October 28, 2002, the Company signed a commitment letter with a financial institution to refinance an unconsolidated-apartment partnership's current mortgage with a non-recourse loan.  The new loan proceeds will repay the current mortgage balance of $7,725,000 and provide a bridge loan facility of $826,000 to fund the transaction costs, and establish a replacement reserve and debt service reserve funds.  The term credit facility will be for the life of our current HAP Contract, maturing in March 2006, with an amortization of 20-year and interest at floating 90-day LIBOR rate plus 2.00%.  The bridge loan facility shall be repaid in full by the earlier of: (i) 90 days from the closing date; or (ii) when the existing restricted reserves of approximately $4,600,000 are released by Puerto Rico Housing Finance Corporation.

Forward-Looking Statements

Certain matters discussed and statements made within this Form 10-Q are forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 and as such may involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of the company to be different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained.  These risks are detailed from time to time in the Company's filings with the Securities and Exchange Commission or other public statements.



|ITEM 3. | QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

The Company is exposed to certain financial market risks, the most predominant being fluctuations in interest rates.  Interest rate fluctuations are monitored by the Company's management as an integral part of the Company's overall risk management program, which recognizes the unpredictability of financial markets and seeks to reduce the potentially adverse effect on the Company's results of operations.

As of September 30, 2002, there have been no material changes in the Company's financial market risk since December 31, 2001 as reported in the Company's Annual Report on Form 10-K.

|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision of the Company's Chief Executive Officer and Chief Financial Officer and with the participation of the Company's management, including the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company's periodic Securities and Exchange Commission filings. No significant changes were made in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

|PART II | OTHER INFORMATION
|------- | -----------------

|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

Langley, et al vs. St. Charles Associates Limited Partnership, et al, No. 08-C-00-269 (Circuit Court for Charles County, Maryland).  In 2000, the owners of a parcel of land located in Charles County sued the Company and one of its officers in the Circuit Court for Charles County, Maryland.  The complaint claimed damages allegedly flowing from trespass and restrictions of access to property resulting from the construction of a county road in Charles County.  The construction in question was completed by St. Charles Community, LLC by agreement with and permission from the County.  The first and second counts of the complaint sought $10,000,000 in compensatory damages and $10,000,000 in punitive damages.  The third and final count sought an easement and right of way to the county road.  On April 13, 2001, the Circuit Court dismissed all individual corporate officers from the lawsuit and dismissed the second and third counts.  The Circuit Court also ordered that the County Commissioners of Charles County be joined as defendants in the case.  The plaintiffs responded by filing an amended complaint purporting to cure the defects prompting the dismissals and adding the County Commissioners as defendants.  On October 12, 2001, the Circuit Court again dismissed the individual corporate officers and dismissed the second and third counts with prejudice.  Accordingly, the only remaining claim against the Company is the trespass count.  The case is scheduled to go to trial in December 2002.

St. Charles Planning & Design Review Board-Smallwood Village vs. George C. Vann, et al., No. 08-C-01-264 (Circuit Court for Charles County, Maryland).  The Company was named as a third-party defendant in a three count complaint alleging that the Company schemed with the County Commissioners, one employee of the County, the St. Charles Planning & Design Review Board ("PDRB"), and the managing agent for the PDRB to prevent him from obtaining signage for one of his lots and the development of a second lot.  Each of the three counts seeks actual and compensatory damages in an amount to be proven at trial, plus punitive damages in the amount of $3,000,000.  The trial judge granted the Company's Motion to Dismiss all counts of the complaint at a May 2002 hearing.  Vann appealed the dismissal and the appellate court dismissed the appeal as premature.  Once the underlying claim between PDRB and Vann is tried, Vann has the right to refile his appeal.  The Company will continue to defend against these charges.



Nissan Auto, Inc. vs. Departamento de Transportacion Publica, et al, No. KDP97-2292, Superior Court of San Juan, Puerto Rico.  On November 17, 1997, Nissan Auto, Inc. filed a claim in the Superior Court of San Juan, Puerto Rico against the Company and eighteen other parties.  The charges stem from the construction of an overpass.  Nissan Auto alleges that the construction material and heavy equipment blocked the entrances to their business causing irreparable damage.  Plaintiff is seeking $2,000,000 in compensatory damages for lost business, additional damages not to be determined until the problem is cured and $120,000 for other damages costs.  On February 11, 2000, IGP filed suit in the Superior Court of San Juan adding General Accident Insurance Company and Royal Insurance Company, IGP's insurance companies, as third party defendants to the suit.  On May 24, 2000, General Accident Insurance Company undertook to cover IGP in this case up to the limit of its policy of $2,000,000.

Antonio Santiago Rodriguez, et als. vs. Municipio de Carolina; ELI G.P. Inc., Et als, No. FDP2000-0265(403), Superior Court of Carolina, Puerto Rico.  On May 13, 2002, Antonio Santiago Rodriguez, et als filed a claim in the Superior Court of Carolina, Puerto Rico against the Company and twelve other parties.  The charges stem from the construction of a local baseball park to be donated by ELI, S.E. to the Municipality of Carolina as part of the agreement to construct a building for the State Insurance Fund of Puerto Rico. Plaintiff alleges that during the construction of the park from May 1999 to July 2000, the site grading work caused rain waters to flood its place of business.  Subsequently the Municipality of Carolina expropriated the land occupied by the Plaintiff who is seeking $813,500 in compensatory damages for lost business, equipment and property, and $250,000 for mental anguish and moral damages.  The Company is a limited partner in ELI and, as such, should have no liability.

St. Charles Associates Limited Partnership, et al. v. County Commissioners of Charles County, et al., No. 89-720 (Circuit Court for Charles County, Maryland).  In this case, which was filed in 1989, the Company sought, among other things, a court ruling that Charles County was not entitled to impose sewer and water connection fees at the then-existing level upon residential units in St. Charles Communities.  That aspect of the litigation was settled by a Settlement Agreement dated November 1989, which was confirmed in a Consent Decree entered in March 1990.

During the course of subsequent litigation over the interpretation of the 1989 Settlement Agreement, the County appealed an injunction issued by the Circuit Court for Charles County limiting the amount the County may charge for sewer connection fees on residential properties located in St. Charles Communities.  On December 5, 2000, the Maryland Court of Special Appeals confirmed the Circuit Court on this issue, and held that the sewer connection fee limitation is a covenant that runs with the land in St. Charles Communities, and therefore, the right to reduced sewer connection fees extends to all those to whom land is sold in the St. Charles Communities.  In November 2001, the Court of Appeals of Maryland affirmed that decision.

On October 19, 2000, the County submitted to the Company a new sewer connection fee study (dated October 12, 2000) which the County claimed justified increasing sewer connection fees in St. Charles Communities.  The Company filed objections to the County's 2000 sewer connection fee study, and challenged its validity under the 1989 Agreement, in the Circuit Court for Charles County.

The Circuit Court referred the matter to mediation.  After several mediation sessions, and subsequent unmediated negotiations, the Company and the County reached a settlement addressing sewer connection fees and other matters.

Under the settlement, (i) the County will provide guaranteed school allocations for 255 new dwelling units per year, cumulative through December 2005; (ii) sewer connection fees for the next 2000 units in Fairway Village will be $1,608 less per unit than the fee charged to builders outside of St. Charles; (iii) a refund has been made to ACPT's predecessor for certain water and sewer fees previously paid; and (iv) the County has agreed to open the possibility of the Company's being allowed to annex additional contiguous land to St. Charles.

The County also conditionally agreed to issue municipal bonds to finance the construction of certain infrastructure needed to develop St. Charles.  In exchange, the Company agreed to obtain letters of credit to guarantee repayment of the bonds.  The Company also agreed to accelerate the construction of two major roadway links to the Charles County road system and dismiss all pending water and sewer litigation.

The complete terms of the settlement are contained in an Amended Order in Docket 90 before the County Commissioners of Charles County, a Consent Judgment in the Circuit Court, an Indenture, and a Settlement Agreement.

|ITEM 2. | CHANGES IN SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------

None.

|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

None.

|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

None

|ITEM 5. | OTHER INFORMATION
|------- | -----------------



None.

|ITEM 6(a). | EXHIBITS
|---------- | --------

Exhibit Number and Description



|10.1 | Property Management Agreement by and between Capital Park Apartments Limited Partnership and American Rental Management Company dated October 29, 2002.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2 | Amended Order to Docket #90 dated July 22, 2002.                                                                                                       
|99.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                
|99.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                

|ITEM 6(b). | REPORTS ON FORM 8-K
|---------- | -------------------

None





SIGNATURES



Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                          |     | AMERICAN COMMUNITY PROPERTIES TRUST                   
|------------------------- | --- | ------------------------------------------------------
|                          |     | (Registrant)                                          
|                          |     |                                                       
|Dated:  November 14, 2002 | By: | /s/ J. Michael Wilson                                 
|                          |     | J. Michael Wilson
Chairman and Chief Executive Officer
|                          |     |                                                       
|Dated:  November 14, 2002 | By: | /s/ Cynthia L. Hedrick                                
|                          |     | Cynthia L. Hedrick
Chief Financial Officer            





CERTIFICATION



I, J. Michael Wilson, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of American Community Properties Trust;

2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.	The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



|Date: | November 14, 2002 |  | /s/ J. Michael Wilson               
|----- | ----------------- |  | ------------------------------------
|      |                   |  | J. Michael Wilson                   
|      |                   |  | Chairman and Chief Executive Officer





CERTIFICATION



I, Cynthia L. Hedrick, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of American Community Properties Trust;

2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.	The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



|Date: | November 14, 2002 |  | /s/ Cynthia L. Hedrick 
|----- | ----------------- |  | -----------------------
|      |                   |  | Cynthia L. Hedrick     
|      |                   |  | Chief Financial Officer